Musk Confirms $35,000 Base Tesla Model 3 Still 6 Months Away

blue Tesla Model 3 front

JUN 8 2018 BY STEVEN LOVEDAY 41

A few weeks ago, Tesla CEO Elon Musk Tweeted about a potential timeline for the base Model 3 and now we have further confirmation.

When asked on Twitter about information pertaining to the standard battery Tesla Model 3, Musk reiterated that a target rate of production and target cost must be obtained before shipping the minimum cost trim. He noted that Tesla could “lose money &  die” if it didn’t follow this process. The CEO explained that Tesla would need three to six months of 5,000-per-week production before being able to bring the $35,000 car to market.

Fast forward to the recent 2018 Tesla Annual Shareholder Meeting and Musk spoke to this once again. When asked about whether or not he could promise that the $35,000 Model 3 would, in fact, become a reality, Musk said it is definitely coming. He shared that Tesla should begin building the car in the first quarter of 2019. Musk’s words (via Teslarati):

Yes. We will definitely offer a $35,000 version of the Model 3. And probably at the end of this year is when we will be able to make a smaller version of the battery pack, and get into volume production of $35,000 version in Q1 next year. We would definitely honor that obligation, and we would do so right now if it were possible.

The base Model 3 will be single-motor, rear-wheel drive, and have a smaller battery pack. It was the first Model 3 that Tesla announced publicly, with at least 215 miles of range and a zero-to-60-mph-time under six seconds. Years before the Model 3 came to be, Musk already made indirect references to the $35,000 price tag. Bloomberg later confirmed the $35,000 price. Finally, when pricing was officially made public, again, $35,000 was the dollar amount.

Many people assumed that this version would be released initially, although Tesla never specified such. Additionally, many people figured that they would be able to partake in the full $7,500 U.S. federal EV tax credit, making the base Model 3 ring in at an incredible $27,500. A Tesla for this kind of money took the world by storm and is surely part of the reason the automaker was able to secure nearly a half-million paid reservations.

It wasn’t long before the realization came that the base Model 3 wasn’t coming for a very long time. In some people’s minds, it may never come. However, Musk has made it clear now on multiple occasions that Tesla will stand true to its word and bring the car to market. We have no idea how many copies the automaker plans to make, as much as we don’t know how many people actually want the base version.

There are many variables involved here. If Tesla is successful with the ramp up and begins making a notable profit – and there is high demand for the base Model 3 – one would assume the automaker will make a concerted effort to fill those orders.

However, if production and profits aren’t where they need to be and/or there’s not a lot of demand at that point in time, due to many already settling for another trim or a different car, Tesla won’t likely build a bunch of stripped-down models. The tax credit situation also adds a huge element of uncertainty to the equation.

Again, we’ll just have to wait and see how this all turns out.

Source: Teslarati

Categories: Tesla

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41 Comments on "Musk Confirms $35,000 Base Tesla Model 3 Still 6 Months Away"

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God/Bacardi

Serious question, has Musk ever gotten a non-VIP vehicle delivery timeline prediction correct?

Magnus H

Prediction? He’s the boss, he decides and he should know.

kbm3

Model 3 I spite of all odds. VIP vehicle is performance version of Model 3.

(⌐■_■) Trollnonymous

IMHO, He’s sandbagging……

Kimmo57

All I want to know is when will there be a heated steering wheel.

(⌐■_■) Trollnonymous

Use the Musk Flame Thrower?
😛

eject

So the new 60kWh Leaf will be cheaper, go further and arrives sooner.

Assaf

One would hope so. But Nissan too, has been known to let ramp schedules and slopes to slip by several months at best.

EVShopper

Or you can buy a Bolt.

Patrick

Not in Europe…

Mark

I keep saying this, but why does Tesla have to actually deliver a $35k car in this day and age. If Musk were to just announce that “hey, it’s a different world now. things have changed since we initially planned to offer the $35k version. Inflation, trade wars, Trump, costs of living, etc. We can no longer do the $35k car, but we will offer a $40k car that can deliver 240 miles instead of 220 miles.” Something like that would make sense, alot of things have changed since we were all promised a $35k car. I think reservation holders like myself would completely be fine with Tesla saying the base price will be more like $40k BUT we’re going to make it better (offer more range than the Bolt, come with the all glass roof, no cloth seats, something that helps ease the burden of slightly moving the goal posts of the $35k mass market car to something closer to a $40k mass market car.

Roy_H

Obviously you live in a different world than I do. I don’t consider a glass roof to be basic or required and I am very happy with cloth seats. I think you are asking for $10,000 worth of upgrades for a $5,000 increase in price. There are many of us stretching our budget to its limit just to purchase a $35,000 car and not being able to get the Federal Credit is a deal breaker for many people.

xman

stretching your budget to buy a “want” makes no financial sense

dan

It’s not a dealbreaker if you could never have afforded to make the deal in the first place.

EVShopper

Or just offer the standard range with premium interior for $40k. And drop the option to have cloth seats, metal roof, and lower rate sound system.

wavelet

I live in a country hot enough that I would never buy a car with a glass roof, period. I also consider them less safe. The “premium” interior is worth $1500, not $5000 and is price gouging, as is charging extra for a standard non-black, non-metallic color (only the cheapest economy cars do that, and then it’s $200, not $1000). I consider black to be a non-safe color for cars due to visibility.

Rightofthepeople

Price gouging? That term is most commonly applied in situations where retailers charge well above market price for basic necessities. One could hardly consider a Tesla (or any car for that matter) a basic necessity. Stop listening to Bernie Sanders and Progress radio for a while. There are plenty of cheaper cars out there for you with metal roofs and in many colors, sounds like you should buy one of those.

wavelet

Did you not notice my first sentence? I don’t live in the US, have never heard or read anything by Sanders.
Price gouging for a product/service simply means charging more than is justified by its value.; nothing to do with whether it’s a necessity or not.
I’d never buy a Model 3 anyway, since it’s not a hatchback and has horrible space efficiency (significantly less cargo volume & flexibility than my compact MPV, despite being much larger and a from-scratch BEV). Not to mention the touchscreen UI.

And correct, I don’t consider cars basic necessities (they are in some areas in the US, however, where there’s no decent public transit) — EVs are at most a 10% solution to the problems caused by cars. Much more relevant is going to one vehicle per family in most households, with public transportation (not taxis, including not Uber et al.) bicycles (electric or not) & other 2-wheelers being used for most commuting.

Mark Hathaway

Completely agree!

Assaf

Bait and Switch at its finest.
And this – “we would do so right now if it were possible” – is a flat-out lie.
Of course it is *possible* to make a car with a smaller battery, and without complicated premium and autopilot options. In fact it is more possible, it is easier, and would have likely allowed production to ramp up earlier and faster.
I wonder whether the financial geniuses there made the math of how much it costs to lose a good chunk of your waitlist due to this Bait and Switch.

Philip Robin

Smart people fill the premium orders first (where most of the profit is) over the standard orders. Musk is one of those smart guys, in case you’re wondering.

But you want him to follow communist philosophies?

wavelet

No, just follow through on what he talkied about and Tesla’s mission statement. Noone forced him to start talking about $35K cars. And none of the reservations are orders.

Xcat

Could be worse. The car could get cancelled. So it’ll trickle at the end of the year w minimal tax credit support. Not a Big deal and be happy. It’s a relative short wait.

fotomoto

But it will make the wait for that even smaller tax refund even longer since few, if any, will get to take delivery before Dec. 31. Jan. ’19 deliveries mean it will be the 2020 calendar year before anyone gets their credit back for a base model 3.

Folks needing a quick turnaround on the tax refund to make their finances work usually buy at the end of year which is one reason why December is always a good EV sales month.

Alex

https://twitter.com/Nissan_NL/status/1003904585864531969

nissan netherland tells leaf with more range will come 2019

Philip Robin

Originally they said late 2018.

wavelet

The official announcement / launch is supposed to be in September this year, and actual first deliveries early next year, from what I’ve read, so both could be true.

John

As Musk said, “we need to make a profit in order to stay alive.” He ain’t arbitrarily keeping a highly anticipated product from folks just for giggles. Tesla needs to survive in order to deliver the products that folks want. I’m sure if he could, he’d roll out the pickup, semi, Model 3, Model Y, etc all on the same day with unlimited quantities of each in every option one can think of. But we don’t live in ‘Should Land.’

Assaf

And how exactly is prioritizing the $80k performance version and the dual-motol version before the version that most people wait for, is helping Tesla “survive”? How many units of those will they sell quickly, vs. the up-front cost of preparing the most complicated versions?

stimpacker

Assaf, if there is high demand for a $100K Model S, why wouldn’t there be demand for a $80K TM3? It is equally obvious that high optioned vehicles bring in (much) higher profits (true for other automakers too).

Steven Loveday hit this on the head:
“If production and profits aren’t where they need to be and/or there’s not a lot of demand at that point in time, due to many already settling for another trim or a different car, Tesla won’t likely build a bunch of stripped-down models.”
Yup, I am waiting for a long range TM3 and a base TM3. It is in Tesla’s financial interest to drop the base TM3 (maybe after a few shipments) citing low demand. Hope Tesla remembers that Musk calls it “an obligation”.

John

What ‘stimpacker’ said.

EVShopper

That people are surprised or outraged that Tesla is building and delivering the premium versions first, just shows they weren’t paying attention.

fotomoto

Do you know the fine details on the next release of the Chevrolet Silverado? How about a Kia Rondo? Or the next Chinese EV release? Not everybody is a fanboy reading fanboy sites everyday; rather, they get their news through other avenues such as mainstream media, social media, word of mouth, etc.

Rightofthepeople

Anyone who gets their news through mainstream and social media and doesn’t do their own fact checking, isn’t paying attention (as EVShopper said).

ModernMarvelFan

I think those who are waiting for $35,000 version will be lucky to get $3750 in federal incentives…

Those that want SR version with D motors will probably end up with no federal incentives at all..

BenG

I’d think they can and will produce the dual motor version of standard range pretty much at the same time as the single motor version comes out.

gagaga

thinking of it in financial terms: Tesla will run into severe trouble with their margins, when they sell the 35k models. Delivering on the high priced end of the order pipeline will allow them to generate better margins and thus net profits (losses) for one or two quarters. They will have to show such a “profitable” quarter in order to raise the equity he needs in order to survive.

EDR

Another delay, and in six months there will be another. I am glad I cancelled my M3 reservation and invested the $$ in a Chevy Volt that has almost 10k EV miles already, and I pocketed the tax refund too. I simply don’t see any reason to spend more than $35k on a car for commuting, an opinion shared with many affluent car buyers. I like to invest in appreciating assets not in a car that always will depreciate. I wish Tesla well and will be back when this first rush and all the recalls will be over.

BenG

6 months more of a wait is no problem. I don’t begrudge Tesla selling the high-cost/high-profit versions first, while they are ramping up production and there is plenty of demand for those high-priced versions.

I can’t wait to see the road tests of the new versions coming out. The long-range dual motor (LR-DM) Model 3, non-Performance, is the one I want, and sure the Premium package is nice. So I’m happy that Tesla will be cranking these out at a high rate and filling orders for them before the base model: it means those LR-DM will be available on the secondary market sooner and maybe I’ll pick one up in a few years, letting someone else eat the worst of the depreciation.

I work hard for my money

I predict soon a smart Lawyer is going to file a class action law suit against Telsa on behalf of the $!000 reservation holders, alleging for fraud for offering a $35k EV with the anticipation of the federal tax credit and not delivery it, but instead price gouging by only offering the 50k model. i will cancel my reservation if the tax credit is gone.

Victor

I have been waiting for Elon Musk to say what he said in that tweet. It’s totally necessary for Tesla to hold-off on the base model 3. The Financial health of Tesla depends on them holding-off on the base model. I admire Elan musk’s honesty and candor.